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2017 (12) TMI 1406 - AT - Income TaxAmount received on the retirement of the partner from the firm - taxability of the said receipt under the specific provisions of section 56(2)(vi) - Held that:- The order of the CIT(A) is deficient on reasons for not treating the rights surrendered by the partners, i.e. assessee and Smt. Shakuntala S. Sanghavi to the firm, as the adequate consideration for receiving the said amount. Therefore, in our view, the said finding of the CIT(A) as given in Para Nos. 9.1 to 9.3 suffers from major setback on this issue of surrender of rights/share in the firm for receipt of said consideration by the partners. As such, it is not the case of the Revenue that the assessee continues to be the partner of the firm even after the receipt of the consideration and the assessee has not surrendered the rights of every kind in the firm. From this perspective, the order of the CIT(A) which decided the issue against the assessee relying on the said provisions of section 56(2)(vi) of the Act, is erroneous and therefore, the said order of CIT(A) is required to be reversed and the same is in favour of the assessee. Accordingly, Ground Nos. 2 to 7 by the assessee are allowed.
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